Who invests green? The effect of time preferences, prosocial attitudes and income on individual ESG investments
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2024-07-02
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en
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Current demand for ESG investment products remains insufficient to address the issue of climate change effectively. This problematic lack of demand raises the question which factors drive ESG investment, specifically among retail investors. Based on the 2022 DNB Household Survey, this study investigates to what degree time preferences, prosocial attitudes and disposable income are able to explain what type of retail investor invest green. The outcomes of this study partially support earlier literature that finds positive effects for these predictors, but I emphasise that their relations with ESG investment may be more nuanced than previously assumed. More specifically, I find that differentiating between income levels and ESG investment types is vital for understanding the relationships between ESG investment and its drivers. I additionally find that income levels may not only determine whether, but also how individuals express their prosocial attitudes. Based on these results, this study underlines the importance of ESG investing for mitigating climate change and places particular emphasis on the potential usefulness of green savings products as a sustainable financial instrument for low-income households. Finally, the study provides recommendations for future research and policy.
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Faculteit der Managementwetenschappen